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Sequester doesn’t cut agencies’ year-end spending sprees

- The Washington Times - Monday, September 23, 2013

Despite the deep budget sequester cuts that have tightened belts across the government, the Coast Guard is in a rush to empty its budget coffers — the annual fourth-quarter push for federal agencies to spend all of their money or risk smaller budgets the next year.

"The standards haven't changed," said Carlos Diaz, a Coast Guard spokesman. "We've got to spend our entire operational budget every year."

But the traditional use-it-or-lose-it mentality is getting stricter scrutiny this year, with the cuts mandated by the sequesters having reduced budgets across most departments and agencies.

Indeed, most of those contacted by The Washington Times said they are taking different approaches to spending in light of the belt-tightening.

The Marine Corps said it simply has less to lose because of the cuts, which have sliced $1.4 billion from the service's budget this year. The Corps' fiscal 2014 budget is expected to be short by more than $2 billion because of continued cuts.

"The Marine Corps continues to prudently spend every taxpayer dollar," Capt. Tyler Balzer, a Marine Corps spokesman, said in a statement. "For a fraction of the DOD budget, we will continue to provide the nation its most capable force in readiness."

Known as Christmas in July, the push to spend out budgets has been documented by government auditors for years. The philosophy is that if agencies return unspent money at the end of a fiscal year, Congress will decide it didn't need all of it and will cut funding the next year.

So federal employees go into overdrive by buying office furniture, playground equipment, musical instruments and other items, according to audit reports.

Sen. Tom Coburn, Oklahoma Republican and one of the leading fiscal hawks on Capitol Hill, said that must not happen this year.

In a letter sent to the White House Office of Management and Budget on Sept. 10, Mr. Coburn urged the administration to keep tabs on things.

"The government and those employed by it will face significant fiscal challenges next year, and now is not the time for a federal spending extravaganza," he wrote.

He asked to see every executive department or agency's contracted options during the last quarter of fiscal 2013, unobligated balances as of Oct. 1, 2013, and fiscal 2013 unspent funds as of the same date.

"Agencies should make smart choices as they prepare for next year's budgets," Mr. Coburn wrote. "Any office, department or program scurrying to spend last-minute funds, while earlier in the year furloughing employees to produce savings, should be exposed for poorly managing its sequestered budget, and be subject to judicious oversight of their spending priorities."

Pulling back

One agency where spend-it-or-lose-it practices had taken hold was the Internal Revenue Service, which was investigated for a conference in California that cost more than $4 million. When questioned at a June congressional hearing, Danny Werfel, the acting IRS chief, said the conference was held near the end of the fiscal year when there was leftover money.

An IRS spokeswoman said that mentality has changed. The agency has made big strides in culling extraneous spending and will "continue to look for additional savings as the fiscal year winds down," she said.

The Navy is handling its fourth-quarter spending habits similarly to many other agencies. Since budgets have been tighter, the Navy has had to stick to its monthly spending plan more closely, meaning less remains at the end of the year, a Navy official said.

Another military command is not under the same budget stress as the Navy and is having a "very normal" month. The Army Corps of Engineers made no change to its typical end-of-year spending habits because of sequestration.

"This has been a busy and very normal September for us procedurally," spokesman Gene Pawlik said in a statement. "Sequestration, while it reduced our [fiscal 2013] funding once enacted, did not impose any unusual requirements for us in the 4th quarter with respect to fiscal execution."

Some agencies were less transparent with their year-end spending decisions.

The Bureau of Alcohol, Tobacco, Firearms and Explosives would not comment on how its spending is going, and U.S. Immigration and Customs Enforcement, the Department of Veterans Affairs and the Environmental Protection Agency did not respond to requests asking about their year-end priorities.

Other agencies said they were experiencing little change because of how they are set up. The National Science Foundation noted that its yearly spending plan allows for all money to be allocated before the end of the fiscal year through things like academic grants, while a spokeswoman for the General Services Administration said it was not affected by sequestration but still was "committed to finding ways to save taxpayer dollars."

The Department of Housing and Urban Development could not comment on the full impact of sequestration on the budget until the end of the fiscal year, said the deputy secretary of the department.

"Because of sequestration, HUD offices were closed to the public for five days, and there were no walk-in services available to members of the public," Maurice Jones said in a statement. "While the immediate impacts of sequestration will be measured at the end of the fiscal year, there will be other impacts that will not be felt for months or years to come."

A spokeswoman from the National Institutes of Health said the organization may spend more in the fourth quarter this year, but only because the funding did not come through until the end of the second quarter because of the budget and spending battles throughout the year on Capitol Hill.

"To the extent that sequestration played a role in delaying congressional decisions on FY 2013 appropriations, it may have had an impact on the proportion of total spending done in the fourth quarter," she said in a statement.

U.S. Customs and Border Protection and the Transportation Security Administration declined to comment and referred questions to the Department of Homeland Security. Spokeswoman Marsha Catron would say only that the department has tried to save money for years.

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